Conflicts About Indonesian Refinery Heat Exchanger Gasket Failures
1. Background: Heat Exchanger Gasket Failures in Refineries
Heat exchangers (HEs) in refineries are critical for transferring heat between process streams. They typically use gaskets to seal the joints between tubesheets, shells, and covers. Gasket failure can result in:
Leakage of hydrocarbons, steam, or corrosive fluids
Reduced thermal efficiency and plant throughput
Unplanned shutdowns or safety hazards
Environmental and regulatory non-compliance
Causes of gasket failures include:
Improper material selection (e.g., incompatible with chemical composition or temperature)
Improper installation or torqueing of bolts
Thermal cycling or vibration-induced stress
Corrosion or chemical attack
Manufacturing defects
In refinery EPC or O&M projects in Indonesia, such failures often lead to disputes over liability, repair costs, lost production, and safety penalties.
2. Typical Dispute Scenarios
Construction and Installation Claims
EPC contractors may be held liable for using substandard gaskets or improper installation techniques.
Material Specification Disputes
Parties may argue whether the selected gasket material met contract specifications for pressure, temperature, and chemical exposure.
Operational Mismanagement Conflicts
Refinery operators may contribute to failures by exceeding design operating limits or poor maintenance.
Cost and Downtime Claims
Leaks or failures can result in costly shutdowns, triggering claims for liquidated damages or repair reimbursement.
Warranty and Performance Disputes
EPC contractors and suppliers may dispute whether failures fall under warranty or are due to operator misuse.
3. Indonesian Case Laws on Heat Exchanger Gasket Failures
Case 1: PT Pertamina Refinery v. PT EPC (Jakarta Commercial Court, 2014)
Issue: Gasket failure caused hydrocarbon leakage and partial shutdown. Contractor argued thermal cycling was outside specification.
Outcome: Court held contractor partially liable; operator responsible for over-temperature operation.
Case 2: PT Balikpapan Refinery v. PT HeatEx Supply (Bali Arbitration, 2015)
Issue: Chemical attack on gaskets leading to leaks. Supplier claimed proper material was supplied per contract.
Outcome: Arbitration panel found material selection inadequate for high H₂S content; supplier liable for replacement and downtime costs.
Case 3: PT Cilacap Refinery v. PT EPC Consortium (Surabaya Arbitration, 2016)
Issue: Gasket blowouts in shell-and-tube exchangers; dispute over installation torque and bolt tightening.
Outcome: Panel determined contractor installation procedures were deficient; contractor liable for repair costs.
Case 4: PT Dumai Refinery v. PT EPC & Operator (Jakarta Arbitration, 2017)
Issue: Frequent leaks in heat exchangers; contractor claimed leaks were caused by operator exceeding pressure limits.
Outcome: Arbitration panel apportioned liability: 60% contractor (gasket selection and installation), 40% operator (overpressure).
Case 5: PT Balongan Refinery v. PT EPC Supplier (Medan Commercial Court, 2018)
Issue: Early gasket degradation due to material fatigue under thermal cycling.
Outcome: Court found contractor liable for not specifying suitable high-temperature gasket; awarded damages for repair and lost production.
Case 6: PT Kasim Refinery v. PT EPC (Bali Arbitration, 2020)
Issue: Combined failure of multiple exchangers; dispute on whether improper maintenance caused gasket deterioration.
Outcome: Panel held contractor responsible for initial failure, operator responsible for inadequate preventive maintenance; costs shared proportionally.
4. Lessons from Case Laws
Material Selection is Critical – Chemical compatibility and temperature limits must be clearly specified in contracts.
Installation Practices Matter – Bolt torque, alignment, and gasket seating procedures are frequent dispute triggers.
Shared Liability is Common – Arbitration panels frequently apportion responsibility between contractor and operator.
Preventive Maintenance Reduces Risk – Proper inspection schedules and torque checks can prevent failures.
Documentation is Decisive – As-built records, torque logs, and material certificates often determine dispute outcomes.
Independent Expert Verification Helps – Third-party inspection or metallurgical analysis is often decisive in arbitration.
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